Nik Hashim J:

The Application

The parties have agreed to resolve the issue of limitation that arises in this action by making an application under O. 14A of the Rules of the High Court 1980seeking for the determination of this court on point of law whether the plaintiff's action is time-barred under the Limitation Act 1953 ('the Act'); and the parties have also agreed that in the event the plaintiff's action is time-barred, the plaintiff's action will be dismissed with costs, and if it is not, then judgment will be entered for the plaintiff as prayed.

On 17 December 1986 the plaintiff (the purchaser) and the 1st defendant (the vendor), Kesang Trading Sdn Bhd together with Kesang Housing Sdn Bhd (the proprietor) entered into a sale and purchase agreement in respect of a property held under Geran No. 8414, No. Lot 213, Pekan Jertih, Daerah Besut, Terengganu together with a double storey shop house thereon (the property) for a price of RM220,000. At all material times, the plaintiff had carried out its contractual obligation by making payments totalling RM198,000 as at 4 December 1986 in accordance with the terms of the agreement. On 19 June 1988, without the knowledge of the plaintiff, the proprietor transferred the property into the name of Tanjung Indah Sdn Bhd (the 2nd defendant). On 14 September 1991 the plaintiff entered a private caveat on the said property. Thereafter, at about five years later, ie, on 20 October 1996, the plaintiff filed the present action against the 1st defendant claiming among other things, the return of RM198,000 with interest and costs.

The Contentions Of The Parties

The 1st defendant contends that the plaintiff's action is time-barred by virtue of s. 6 of the Act which bars an action based on contract to be brought after the expiration of six years from the date on which the cause of action accrued. It is contended that the plaintiff's cause of action accrued on 19 June 1988 which is the date on which the proprietor transferred the property into the name of the 2nd defendant. The six-year period within which the plaintiff should have filed its action therefore expired on 18 June 1994. On that ground alone, it is alleged that the plaintiff's claim, which the 1st defendant claims was a simple breach of contract, ought to be dismissed as the claim was only filed on 20 October 1996, approximately two years and four months after limitation had set in.

The plaintiff, on the other hand, argues that the 1st defendant's failure to keep the plaintiff informed of the transfer of the property to the 2nd defendant constitutes a fraudulent concealment within the purview of s. 29(b) of the Act that justifies the postponement of limitation period, which the plaintiff claims does not begin to run until the plaintiff discovered the fraud on 14 September 1991 when the plaintiff entered a private caveat on the said property. Since the action was filed on 20 October 1996, the plaintiff contends that its action is still within the six-year limitation period.

The Law

Section 29 of the Act states:

Where, in the case of any action for which a period of limitation is prescribed by this Act, either:

(a) the action is based upon the fraud of the defendant or his agent or of any person through whom he claims or his agent; or

(b) the right of action is concealed by the fraud of any such person as aforesaid; or

(c) ...,

the period of limitation shall not begin to run until the plaintiff has discovered the fraud or the mistake, as the case may be, or could with reasonable diligence have discovered it:

Section 29(b) in particular, was inserted to protect a plaintiff who was ignorant of his right of action in the case of fraudulent concealment, and to overcome the difficulty that time would otherwise be running against him, unknown to him. (see Credit Corporation (M) Bhd v. Fong Tak Sin[1991] 2 CLJ 871; [1991] 1 CLJ (Rep) 69).

Halsbury's Laws of England, 4th edn at p. 413 states:

Fraudulent concealment has been defined in